Direct cash transfer for LPG consumers starts today

New Delhi: Direct transfer scheme for LPG cylinder subsidy has come into force from June 1. Under the scheme, the government will transfer Rs 435 directly in the bank accounts of LPG consumers in 18 districts of the country.

Consumers will get the money each time they book for an LPG refill. These consumers then will have to buy cooking gas at market price. The government hopes to save Rs 8,000-10,000 crore annually after the scheme is rolled out all over the country.

The government intends to extend the scheme to rest of the country before end of the year but wants to see results in the 18 districts first. The districts selected have high Aadhaar or unique identification number penetration.

Under the scheme, the government will transfer Rs 435 directly in the bank accounts of LPG consumers in 18 districts.

While as many as 89 per cent of the LPG consuming population in these districts have Aadhaar number, the government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred.

After three months, that is from September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy LPG at market price, they said.

Oil Minister M Veerappa Moily will launch the scheme in Tumkur in his home state Karnataka on June 1 while Minister of State for Petroleum and Natural Gas Lakshmi Panabaka will simultaneously kickoff the scheme in Hyderabad, the capital of her home state Andhra Pradesh.

The Cabinet had on May 9 cleared direct benefit transfer on LPG subsidy. The scheme was to be introduced on January 1, but was postponed two times, most recently because only 13 per cent of Aadhaar numbers among the beneficiaries chosen for the launch areas had bank accounts.

The scheme was to be rolled out in 20 districts initially but the launch in Mysore in Karnataka and Mandi in Himachal Pradesh has been put off by a month due to assembly and Parliamentary bypolls, official sources said.

On Friday the oil companies cut price of LPG that consumers have to buy beyond their quota of nine subsidised cylinders in a year, by Rs 45 per bottle. Non-subsidised domestic LPG in Delhi will now cost Rs 802 per 14.2-kg cylinder as against Rs 847 currently.

The price of non-subsidised cooking gas, which was cut by Rs 54 per cylinder from May 11, has further been reduced by Rs 45 per 14.2-kg bottle. The price of a 14.2-kg LPG cylinder that consumers buy beyond their quota of 9 subsidised cylinders has been reduced to Rs 802 from Rs 847.

Rates will vary in different cities, depending upon local sales tax or VAT.

This is the third time that the price of non-subsidised LPG cylinder has been slashed since April. Price was last cut by Rs 54 to Rs 901 on May 1 and by Rs 3 on April 1.